The National Highway Traffic Safety Administration will not appeal a federal court decision which struck down its plan for monitoring vehicle tire pressure, Reuters reports. Instead, the agency will seek more input from the industry before rewriting the standard, which was mandated by Congress after the Firestone tire debacle.

"We had to make a decision on how we were going to proceed and sent out letters...to auto manufacturers and to tire monitoring system suppliers," said a NHTSA spokesman. Responses are due back to NHTSA by Oct. 17 and will form the basis for a new regulation.

The U.S. Court of Appeals for the 2nd Circuit in New York rejected NHTSA's proposal last month to let automakers choose between two monitoring options, saying the proposal was arbitrary and did not meet congressional requirements for improved tire safety, the story said.

One monitoring system, favored by automakers and the White House, would gauge tire pressure by using the vehicle's anti-lock brake system. Another more expensive option, favored by regulators, auto safety experts and consumer groups, measures pressure directly in each tire.

Tire manufacturers say they have no preference on monitoring systems but are pressing the government to ensure that drivers are given adequate warning when one or more tires are underinflated.

A three-year phase-in of tire pressure monitoring was to have started with the 2004 model-year vehicles and both systems are already in use separately in some vehicles.

Suzuki Opens Michigan Research Facility

Suzuki Motor Corp. announced that it has opened a new research and development facility to keep closer tabs on American automotive tastes, the company said in a statement.

Located in Wixom, about 30 miles northwest of Detroit, the $3.7 million, 1.5-acre Suzuki Tech Center is patterned after similar research and development facilities in Japan, Asia and Europe.

The 19,000-square-foot facility will serve as Suzuki's North American center for certification testing, fleet vehicle evaluation, consumer research, product development and other technical work, the company said, adding that the center will support Suzuki's "aggressive plan to triple U.S. auto sales by 2007."

Popularity of Leasing Slips

The number of new-car leases fell 2.02 million in 2001 to 1.89 million in 2002, according to the Association of Consumer Vehicle Lessors.

This modest 6.8% 2002 volume decline shows that leasing activity has almost stabilized, the association said in a statement. However, since the peak of leasing in 1999, leasing volume has fallen 42.6%.

"There were a number of factors contributing to lower lease volumes," explained Rob Mize, ACVL President, "including the expansion of the 0% retail installment programs and other similar manufacturer installment sale promotions, continued declines in residual values (causing higher monthly lease payments that make leasing less competitive compared to financing), and fewer manufacturer subvented lease programs."

ACVL members also reported that their end-of-term residual losses increased somewhat in 2002. Residual losses increased to $3,269 in 2002 from a weighted average of $2,961 in 2001, a 9.4% increase. While the increased residual loss level was an unwelcome development for lessors, consumers who leased reaped the substantial benefit by having lessors absorb these increased losses.

Put another way, consumers whose leases ended in 2002 came out far better than those who had purchased their vehicles since the residual value used in the leases that ended in 2002 was more than $3,200 greater than the actual trade-in values of the vehicles. Thus, consumers who leased saved an average of more than $3,200 compared with those who bought their vehicles in the same year, the study revealed.

"Now more than ever, it's important that consumers be informed about the benefits and responsibilities of leasing before they decide whether to lease or buy," said Mize.

The ACVL said its survey highlights a number of areas in which bank and captive vehicle leasing programs differ. The average lease term of bank lessors was 50 months in 2002, compared to slightly less than 40 months for captive finance company lessors. The average booking rate of applications received for captives was 72% compared to 51% for banks. On the other hand, the average bank lessor was more selective on credit with 86% of new leases having a credit bureau score above 680 (a standard measurement of a "strong" credit applicant). Captive Finance companies, which support vehicle sales of their manufacturing partner, had 60% of leases over that same threshold.

Security deposits continued to disappear. A few years ago, security deposits were so commonplace that they were collected in virtually all leases. In response to consumer preferences, this began to change in the late 90's. In 2001, for the first time lease security deposits became the exception rather than the rule, being assessed in only 35 percent of the leases of the average lessor. This trend continued into 2002: only 22 percent of leases booked had security deposits. Banks reported that just 7.7% of leases had security deposits versus 32.7% for captives. The decline in security deposits is in response to consumer requests to minimize upfront lease costs. Many members accommodate that consumer preference but charge higher rates or acquisition fees when security deposits are waived.

"A major part of our mission at ACVL is to provide consumers with the information they need to make informed decisions. Our Web site — — is a good place to start for those who want to consider leasing among their options," noted Mize. A more complete review of the survey is available on the site.

ACVL has conducted its annual member lease survey since 1993. ACVL members account for approximately 80% of all consumer vehicle leasing in the U.S.